SaaS multiples are looking good

08/07/2017By Sammy Abdullah, CFA

Publicly traded revenue multiples, in our view, are by far the best metrics to determine: i) where valuations should be now for Series A/B companies and; ii) where valuations are trending. Right now, the data is showing us that for SaaS companies, the revenue multiple at 6.80x trailing twelve months revenue is the highest it’s been in years. That means it’s a great time to raise money or sell your business.

What are revenue multiples? As a quick refresher, the revenue multiple is determined by dividing the value of the business by the latest revenue. So if the business is worth $5mm and revenue today is at $1mm, the revenue multiple is 5x. By knowing what the honest multiple is for other companies that are similar to yours, I can then value your business by applying that same revenue multiple to your business. It’s not perfect for many reasons (large public companies are far different than small private ones), but it is the most unbiased and honest way to value a business.

Below is the data for 75 publicly traded SaaS companies we track. As you can see, the latest revenue multiple we see is 6.80x on median and 6.81x on average. That median is the highest it’s been since Q4 2014 when we started tracking the data. Since Q4 2014, the range of medians has been 4.54x to 6.80x, with an average of 5.86x.

TTM

TTM

TTM

Market

EBITDA

Q1 2017

Name

Ticker

Revenue

EBITDA

FCF

Cap

Debt

Cash

EV Calc

Margin

EV/Rev

2U

TWOU

$223

-$18

-$13

$2,430

$14

$143

$2,301

-8%

10.31x

Athenahealth, Inc.

ATHN

$1,150

$128

$169

$5,590

$280

$71

$5,799

11%

5.04x

Bazaarvoice, Inc.

BV

$202

-$5

$15

$400

$32

$91

$341

-2%

1.69x

Benefitfocus, Inc.

BNFT

$243

-$13

-$10

$1,130

$109

$58

$1,181

-5%

4.87x

Box, Inc.

BOX

$426

-$116

$12

$2,600

$80

$183

$2,497

-27%

5.87x

BroadSoft, Inc.

BSFT

$348

$26

$67

$1,350

$204

$300

$1,255

8%

3.61x

Castlight Health, Inc.

CSLT

$107

-$50

-$34

$548

$0

$103

$445

-47%

4.17x

Cornerstone OnDemand, Inc.

CSOD

$435

-$42

$43

$2,300

$241

$290

$2,250

-10%

5.17x

Five9, Inc.

FIVN

$171

$3

$7

$1,210

$46

$56

$1,199

2%

7.01x

Hortonworks, Inc.

HDP

$199

-$233

-$56

$859

$0

$84

$775

-117%

3.89x

HubSpot, Inc.

HUBS

$294

-$36

$35

$2,650

$1

$123

$2,528

-12%

8.59x

LivePerson Inc.

LPSN

$216

$6

$0

$795

$0

$54

$740

3%

3.43x

LogMeIN, Inc.

LOGM

$618

$128

$221

$6,140

$0

$286

$5,855

21%

9.48x

Marin Software, Inc.

MRIN

$93

-$9

$4

$45

$3

$33

$15

-9%

0.17x

Medidata Solutions, Inc.

MDSO

$509

$77

$106

$4,500

$271

$367

$4,404

15%

8.66x

MobileIron, Inc.

MOBL

$172

-$50

-$1

$419

$0

$89

$330

-29%

1.92x

New Relic, Inc.

NEWR

$263

-$49

$19

$2,560

$0

$206

$2,354

-19%

8.93x

Proofpoint, Inc.

PFPT

$442

-$17

$135

$3,750

$378

$429

$3,698

-4%

8.36x

Qualys, Inc.

QLYS

$205

$49

$83

$1,490

$0

$245

$1,245

24%

6.08x

RealPage, Inc.

RP

$593

$89

$141

$3,200

$121

$60

$3,261

15%

5.50x

RingCentral, Inc.

RNG

$405

-$12

$34

$2,620

$0

$150

$2,470

-3%

6.10x

salesforce.com, Inc.

CRM

$8,860

$445

$2,340

$6,465

$2,540

$3,220

$5,785

5%

0.65x

ServiceNow, Inc.

NOW

$1,630

-$32

$546

$1,871

$1,140

$1,690

$1,321

-2%

0.81x

Splunk, Inc.

SPLK

$1,010

-$288

$208

$8,320

$84

$1,090

$7,314

-29%

7.24x

SPS Commerce, Inc.

SPSC

$207

$23

$28

$992

$0

$158

$834

11%

4.04x

The Ultimate Software Group, Inc.

ULTI

$823

$63

$167

$6,720

$9

$84

$6,645

8%

8.08x

Veeva Systems Inc.

VEEV

$582

$141

$177

$8,920

$0

$664

$8,256

24%

14.18x

Wix.com Ltd.

WIX

$356

-$39

$66

$2,790

$1

$186

$2,605

-11%

7.32x

WorkDay, Inc.

WDAY

$1,700

-$242

$366

$21,080

$541

$2,120

$19,501

-14%

11.47x

Zendesk, Inc.

ZEN

$337

-$84

$27

$2,900

$0

$248

$2,652

-25%

7.88x

Secureworks

SCWX

$443

-$27

-$10

$887

$0

$92

$795

-6%

1.79x

Appfolio, Inc.

APPF

$115

$0

$16

$1,190

$0

$27

$1,163

0%

10.15x

Atlassian Corporation

TEAM

$620

-$16

$199

$8,070

$0

$550

$7,520

-3%

12.13x

Twilio

TWLO

$305

-$41

$7

$2,640

$0

$289

$2,351

-13%

7.70x

Instructure

INST

$122

-$49

-$31

$934

$0

$39

$895

-40%

7.37x

Mindbody, Inc

MB

$160

-$9

$4

$1,200

$15

$224

$991

-6%

6.21x

Shopify

SHOP

$444

-$30

$17

$9,100

$0

$396

$8,704

-7%

19.60x

Xactly

XTLY

$97

-$12

$1

$504

$13

$44

$473

-13%

4.88x

Nutanix

NTNX

$681

-$351

$10

$2,560

$0

$350

$2,210

-52%

3.25x

Apptio

APTI

$168

-$23

-$2

$705

$0

$111

$594

-14%

3.54x

Blackline

BL

$135

-$14

-$2

$1,990

$0

$101

$1,889

-10%

13.97x

Coupa Software

COUP

$145

-$32

-$4

$1,620

$0

$238

$1,382

-22%

9.51x

Okta

OKTA

$182

-$86

-$37

$2,090

$0

$224

$1,866

-47%

10.28x

Alarm.com

ALRM

$276

$47

$23

$1,760

$74

$63

$1,771

17%

6.41x

Alteryx Inc

AYX

$96

-$20

-$4

$1,180

$0

$164

$1,016

-21%

10.58x

Amber Road

AMBR

$75

-$12

-$2

$254

$24

$15

$263

-16%

3.52x

Appian Corporation

APPN

$135

-$15

$0

$1,170

$20

$35

$1,155

-11%

8.54x

Blackbaud

BLKB

$745

$126

$160

$4,330

$356

$14

$4,672

17%

6.27x

Callidus Software

CALD

$216

-$8

$29

$1,580

$0

$183

$1,397

-4%

6.45x

Channel Advisors

ECOM

$115

-$7

$9

$275

$1

$63

$213

-6%

1.85x

Cloudera

CLDR

$284

-$333

-$88

$2,270

$0

$222

$2,048

-117%

7.21x

Ebix

EBIX

$306

$111

$89

$1,820

$309

$123

$2,006

36%

6.55x

Ellie Mae

ELLI

$394

$82

$114

$2,970

$0

$334

$2,636

21%

6.70x

Everbridge Inc

EVBG

$83

-$10

$10

$659

$0

$40

$619

-13%

7.50x

FireEye

FEYE

$720

-$219

-$9

$2,610

$751

$875

$2,486

-30%

3.45x

HealthStream

HSTM

$238

$24

$47

$753

$0

$116

$637

10%

2.67x

J2 Global

JCOM

$928

$376

$269

$4,080

$828

$187

$4,721

40%

5.08x

Kinaxis

KXSCF

$121

$20

$33

$1,500

$0

$142

$1,358

17%

11.18x

Medidata Solutions

MDSO

$509

$77

$106

$4,470

$271

$367

$4,374

15%

8.60x

Mimecast

MIME

$187

$2

$33

$1,580

$2

$112

$1,471

1%

7.88x

Mulesoft

MULE

$235

-$54

$1

$2,820

$0

$256

$2,564

-23%

10.92x

NantHealth

NH

$103

-$147

-$65

$520

$192

$125

$587

-142%

5.68x

Paycom Software

PAYC

$359

$79

$109

$4,170

$32

$93

$4,109

22%

11.46x

Paylocity Holding

PCTY

$284

$17

$47

$2,340

$0

$101

$2,239

6%

7.89x

Q2 Holdings

QTWO

$161

-$19

-$7

$1,600

$0

$82

$1,518

-12%

9.43x

Tabula Rasa Healthcare

TRHC

$102

$4

$4

$269

$2

$3

$267

4%

2.63x

Talend

TLND

$116

-$26

$4

$1,090

$0

$95

$995

-22%

8.57x

The Trade Desk

TTD

$226

$59

$35

$2,260

$26

$107

$2,179

26%

9.65x

Upland Software

UPLD

$78

$9

$9

$500

$57

$19

$538

11%

6.90x

Workiva

WK

$186

-$34

$11

$807

$21

$65

$763

-18%

4.10x

Yext

YEXT

$134

-$45

-$24

$1,130

$0

$134

$996

-33%

7.42x

Zix

ZIXI

$62

$12

$15

$290

$0

$23

$267

20%

4.32x

Average

$471

-$10

$84

$2,655

$126

$274

$2,508

-9%

6.81x

Median

$237

-$12

$16

$1,790

$1

$124

$1,644

-6%

6.80x

With revenue multiples so high, it’s a good time to consider selling your business or raising capital.